Peanut Product Recall Update: Salmonella Outbreak Affects Sales

Not surprisingly, the discovery of salmonella in peanut butter manufactured and distributed by the Peanut Corp. of America (PCA) [m] a discovery that has so far been linked to eight deaths and hundreds of cases of illness [m] has had a negative effect on recent peanut butter sales, according to findings by Nielsen.

During the four-week period ending Jan. 24, 2009, $72.5 million of jarred peanut butter was sold, a decline of 11.5 percent during the previous four-week period and 3.8 percent compared with the same period a year ago. While the year-over-year decline may seem minimal, it comes after eight consecutive periods of double-digit growth in this category, according to Todd Hale, Nielsen's SVP, consumer and shopper insights.

Nielsen, which tracks sales of peanut products at thousands of food, drug and mass merchandise stores (excluding Walmart) across the country, found 33.8 million pounds of jarred peanut butter was sold during the four weeks, down 11 percent from the previous four weeks and down 22.1 percent from the same period a year ago. Again, this pattern is different from that noted for the prior periods.

"The peanut butter outbreak shows little ill-effect on prepackaged peanuts, but the peanut butter category is definitely showing the impact," said Hale. "It would appear that manufacturers and retailers are quickly removing potentially tainted products off store shelves. For those who are not affiliated with the particular supplier of tainted product, now is the time to take extra measures to educate consumers and minimize any negative impact."

Nearly $32 million worth of prepackaged peanuts, including bags, cans, jars and unshelled, were sold in the four-week period. This is down 25.9 percent vs. the previous four-week period, and down 1 percent from the same period a year ago. This reflects the typical seasonal pattern seen for each of the past four years.

Among the retailers and CPG companies that have recently issued recalls related to the outbreak are Nash Finch, Kmart, Rite Aid, Midwest Ice Cream, Christie Cookie, The George J. Howe Co., and Weaver Popcorn Co., while Skippy Peanut Butter was eager to spread the word that its products were unaffected by the contamination or recall.

In a statement last week, PCA tried to counter the tide of bad publicity, including reports that peanut butter potentially tainted with salmonella had made its way to schools in three states, by referring to "a great deal of confusing and misleading information in the media."

The company added that that in 2008, there were regular visits and inspections by federal and state regulators, as well as independent audit and food safety firms, of the Blakely, Ga. facility to which the infection was traced, and that the plant passed the inspections. "Unfortunately, due to the nature of the ongoing investigations, we will not be able to comment further about the facts related to this matter at this time," PCA said.

In further PCA news, The U.S. Department of Agriculture last week suspended, and proposed to debar, the company and its subsidiary Tidewater Blanching LLC from doing business with the federal government. As well as being excluded from participating in government contracts or subcontracts, as well as federal non-procurement programs, PCA is also excluded from doing business as agents or representatives of other contractors, including serving as a subcontractor to other individuals or companies doing business with the government. The suspension will remain in effect for one year and the debarment is proposed for three years.

In a separate action, Secretary of Agriculture Tom Vilsack removed Stewart Parnell, president and CEO of the Peanut Corporation of America, from USDA's Peanut Standards Board, on which he had served as a member. The board advises the Secretary on quality and handling standards for domestic and imported peanuts sold in the United States.

Also in Washington, Rep. Rosa L. DeLauro (D-Conn.) has introduced food safety reform legislation, the Food Safety Modernization Act, which aims to fix systemic problems in the food safety system by modernizing laws and establishing a separate Food Safety Administration led by an expert in food safety within the Department of Health and Human Services.

Among the legislation's backers are the Center for Center for Foodborne Illness Research and Prevention, Center for Science in the Public Interest, Consumer Federation of America, Consumers Union, Food & Water Watch, The Pew Charitable Trusts, Safe Tables Our Priority and Trust for America’s Health.

"This salmonella outbreak represents the full-scale breakdown of a patchwork food safety system. And it should act as the final wake-up call," said DeLauro. "That is why…I am introducing the Food Safety Modernization Act to separate food safety regulation from drug and device approvals and to restore the balance that has long been missing at Health and Human Services."